BILL AS INTRODUCED S.127
2025 Page 1 of 50
VT LEG #381201 v.6
S.127 1
Introduced by Committee on Economic Development, Housing and General 2
Affairs 3
Date: 4
Subject: Housing; housing programs; conservation and development; land use; 5
municipal zoning; Vermont Bond Bank; taxation and finance; tax 6
credits 7
Statement of purpose of bill as introduced: This bill proposes to make multiple 8
changes related to housing programs. Specifically, the bill proposes to make 9
amendments to the Vermont Rental Housing Improvement Program and create 10
the Manufactured Home Improvement and Repair Program, create the 11
Vermont Infrastructure Sustainability Fund, allow for tax credits for the First-12
Generation Homebuyer and Down Payment Assistance Program, make 13
changes to the Brownfield Property Cleanup Program, create a study 14
committee related to disability housing, and require multiple housing-related 15
reports. This bill additionally proposes to create the Community Housing 16
Infrastructure Program, administered by the Vermont Economic Progress 17
Council, to authorize municipalities to use tax increment financing to pay for 18
infrastructure that will stimulate the development of housing. 19
An act relating to housing and housing development 20 BILL AS INTRODUCED S.127
2025 Page 2 of 50
VT LEG #381201 v.6
It is hereby enacted by the General Assembly of the State of Vermont: 1
* * * Vermont Rental Housing Improvement Program * * * 2
Sec. 1. 10 V.S.A. § 699 is amended to read: 3
§ 699. VERMONT RENTAL HOUSING IMPROVEMENT PROGRAM 4
(a) Creation of Program. 5
* * * 6
(5)(A) The Department may cooperate with and subgrant funds to State 7
agencies and governmental subdivisions and public and private organizations 8
in order to carry out the purposes of this subsection (a). 9
(B) Solely with regards to actions undertaken pursuant to this 10
subdivision (5), entities, including grantees, subgrantees, and contractors of the 11
State, shall be exempt from the provisions of 8 V.S.A. chapter 73 (licensed 12
lenders, mortgage brokers, mortgage loan originators, sales finance companies, 13
and loan solicitation companies). 14
* * * 15
(d) Program requirements applicable to grants and forgivable loans. 16
(1)(A) A grant or loan shall not exceed: 17
(i) $70,000.00 per unit, for rehabilitation or creation of an eligible 18
rental housing unit meeting the applicable building accessibility requirements 19
under the Vermont Access Rules; or 20 BILL AS INTRODUCED S.127
2025 Page 3 of 50
VT LEG #381201 v.6
(ii) $50,000.00 per unit, for rehabilitation or creation of any other 1
eligible rental housing unit. Up to an additional $20,000.00 per unit may be 2
made available for specific elements that collectively bring the unit to the 3
visitable standard outlined in the rules adopted by the Vermont Access Board. 4
* * * 5
(e) Program requirements applicable to grants and five-year forgivable 6
loans. For a grant or five-year forgivable loan awarded through the Program, 7
the following requirements apply for a minimum period of five years: 8
(1) A landlord shall coordinate with nonprofit housing partners and local 9
coordinated entry homelessness service organizations approved by the 10
Department to identify potential tenants. 11
(2)(A) Except as provided in subdivision (2)(B) of this subsection 12
subdivision (e)(2), a landlord shall lease the unit to a household that is: 13
(i) exiting homelessness, including any individual under 25 years 14
of age who secures housing through a master lease held by a youth service 15
provider on behalf of individuals under 25 years of age; 16
(ii) actively working with an immigrant or refugee resettlement 17
program; or 18
(iii) composed of at least one individual with a disability who 19
receives or is eligible approved to receive Medicaid-funded home and 20 BILL AS INTRODUCED S.127
2025 Page 4 of 50
VT LEG #381201 v.6
community based home- and community-based services or Social Security 1
Disability Insurance; 2
(iv) displaced due to activity related to climate change or due to a 3
natural disaster; or 4
(v) with approval from the Department in writing, an organization 5
that will hold a master lease that explicitly states the unit will be used in 6
service of the populations described in this subsection (e). 7
* * * 8
(4)(A) A landlord may convert a grant to a forgivable loan upon 9
approval of the Department and the housing organization that approved the 10
grant. 11
(B) A landlord who converts a grant to a forgivable loan shall receive 12
a 10-percent prorated credit for loan forgiveness for each year in which the 13
landlord participates in the Program. 14
(f) Requirements applicable to 10-year forgivable loans. For a 10-year 15
forgivable loan awarded through the Program, the following requirements 16
apply for a minimum period of 10 years: 17
(1) A landlord shall coordinate with nonprofit housing partners and local 18
coordinated entry organizations to identify potential tenants The total cost of 19
rent for the unit, including utilities not covered by rent payments, shall not 20
exceed the applicable fair market rent established by the Department of 21 BILL AS INTRODUCED S.127
2025 Page 5 of 50
VT LEG #381201 v.6
Housing and Urban Development, except that a landlord may accept a housing 1
voucher that exceeds fair market rent, if available. 2
(2)(A) Except as provided in subdivision (2)(B) of this subsection (f), a 3
landlord shall lease the unit to a household that is: 4
(i) exiting homelessness, including any individual under 25 years 5
of age who secures housing through a master lease held by a youth service 6
provider on behalf of individuals under 25 years of age; 7
(ii) actively working with an immigrant or refugee resettlement 8
program; or 9
(iii) composed of at least one individual with a disability who is 10
eligible to receive Medicaid-funded home and community based services. 11
(B) If, upon petition of the landlord, the Department or the housing 12
organization that issued the grant determines that a household under 13
subdivision (2)(A) of this subsection (f) is not available to lease the unit, then 14
the landlord shall lease the unit: 15
(i) to a household with an income equal to or less than 80 percent 16
of area median income; or 17
(ii) if such a household is unavailable, to another household with 18
the approval of the Department or housing organization. 19
(3)(A) A landlord shall accept any housing vouchers that are available to 20
pay all, or a portion of, the tenant’s rent and utilities. 21 BILL AS INTRODUCED S.127
2025 Page 6 of 50
VT LEG #381201 v.6
(B) If no housing voucher or federal or State subsidy is available, the 1
cost of rent for the unit, including utilities not covered by rent payments, shall 2
not exceed the applicable fair market rent established by the Department of 3
Housing and Urban Development. 4
(4) The Department shall forgive 10 percent of the a prorated amount of 5
a forgivable loan for each year a landlord participates in the loan program. 6
* * * 7
(i) Creation of the Vermont Rental Housing Improvement Program 8
Revolving Fund. Funds repaid or returned to the Department from forgivable 9
loans or grants funded by the Program shall return to the Vermont Rental 10
Housing Improvement Revolving Fund to be used for Program expenditures 11
and administrative costs at the discretion of the Department. 12
* * * MHIR * * * 13
Sec. 2. 10 V.S.A. § 700 is added to read: 14
§ 700. VERMONT MANUFACTURED HOME IMPROVEMENT AND 15
REPAIR PROGRAM 16
(a) There is created within the Department of Housing and Community 17
Development the Manufactured Home Improvement and Repair Program. The 18
Department shall design and implement the Program to award funding to 19
statewide or regional nonprofit housing organizations, or both, to provide 20
financial assistance or awards to manufactured homeowners and manufactured 21 BILL AS INTRODUCED S.127
2025 Page 7 of 50
VT LEG #381201 v.6
home park owners to improve existing homes, incentivize new slab placement 1
for prospective homeowners, and incentivize park improvements for infill of 2
more homes. 3
(b) The following projects are eligible for funding through the Program: 4
(1) The Department may award up to $20,000.00 to owners of 5
manufactured housing communities to complete small-scale capital needs to 6
help infill vacant lots with homes, including disposal of abandoned homes, lot 7
grading and preparation, the siting and upgrading of electrical boxes, 8
enhancing E-911 safety issues, transporting homes out of flood zones, and 9
improving individual septic systems. Costs awarded under this subdivision 10
may also cover legal fees and marketing to help make it easier for homeseekers 11
to find vacant lots around the State. 12
(2) The Department may award funding to manufactured homeowners 13
for which the home is their primary residence to address habitability and 14
accessibility issues to bring the home into compliance with safe living 15
conditions. 16
(3) The Department may award up to $15,000.00 per grant to a 17
homeowner to pay for a foundation or federal Department of Housing and 18
Urban Development-approved slab, site preparation, skirting, tie-downs, and 19
utility connections on vacant lots within a manufactured home community. 20 BILL AS INTRODUCED S.127
2025 Page 8 of 50
VT LEG #381201 v.6
(c) The Department may adopt rules, policies, and guidelines to aid in 1
enacting the Program. 2
* * * Vermont Infrastructure Sustainability Fund * * * 3
Sec. 3. 24 V.S.A. chapter 119, subchapter 6 is amended to read: 4
Subchapter 6. Special Funds 5
* * * 6
§ 4686. VERMONT INFRASTRUCTURE SUSTAINABILITY FUND 7
(a) Creation. There is created the Vermont Infrastructure Sustainability 8
Fund within the Vermont Bond Bank. 9
(b) Purpose. The purpose of the Fund is to provide capital to extend and 10
increase capacity of water and sewer service and other public infrastructure in 11
municipalities where lack of extension or capacity is a barrier to housing 12
development. 13
(c) Administration. The Vermont Bond Bank may administer the Fund in 14
coordination with and support from other State agencies, government 15
component parts, and quasi-governmental agencies. 16
(d) Program parameters. 17
(1) The Vermont Bond Bank, in consultation with the Department of 18
Housing and Community Development, shall develop program guidelines to 19
effectively implement the Fund. 20 BILL AS INTRODUCED S.127
2025 Page 9 of 50
VT LEG #381201 v.6
(2) The program shall provide low-interest loans or bonds to 1
municipalities to expand infrastructure capacity. Eligible activities include: 2
(A) preliminary engineering and planning; 3
(B) engineering design and bid specifications; 4
(C) construction for municipal waste and wastewater systems; 5
(D) transportation investments, including those required by municipal 6
regulation, the municipality’s official map, designation requirements, or other 7
planning or engineering identifying complete streets and transportation and 8
transit related improvements, including improvements to existing streets; and 9
(E) other eligible activities as determined by the guidelines produced 10
by the Vermont Bond Bank in consultation with the Department of Housing 11
and Community Development. 12
(e) Application requirements. Eligible project applications shall 13
demonstrate: 14
(1) the project will create reserve capacity necessary for new housing 15
unit development; 16
(2) the project has a direct link to housing unit production; and 17
(3) the municipality has a commitment to own and operate the project 18
throughout its useful life. 19 BILL AS INTRODUCED S.127
2025 Page 10 of 50
VT LEG #381201 v.6
(f) Application criteria. In addition to any criteria developed in the 1
program guidelines, project applications shall be evaluated using the following 2
criteria: 3
(1) whether there is a direct connection to proposed or in-progress 4
housing development with demonstrable progress toward regional housing 5
targets; 6
(2) whether the project is an expansion of an existing system and the 7
proximity to a designated area; 8
(3) the project readiness and estimated time until the need for financing; 9
(4) the ranking of the community on the Vermont Department of 10
Finance and Management, Vermont Community Index; and 11
(5) the demonstration of financing for project completion or completion 12
of a project component. 13
(g) Award terms. The Vermont Bond Bank, in consultation with the 14
Department of Housing and Community Development, shall establish award 15
terms that may include: 16
(1) the maximum loan or bond amount; 17
(2) the maximum term of the loan or bond amount; 18
(3) the time by which amortization shall commence; 19
(4) the maximum interest rate; 20 BILL AS INTRODUCED S.127
2025 Page 11 of 50
VT LEG #381201 v.6
(5) whether the loan is eligible for forgiveness and to what percentage or 1
amount; 2
(6) the necessary security for the loan or bond; and 3
(7) any additional covenants encumbering the improved properties to 4
further secure the loan or bond. 5
(h) Revolving fund. Any funds repaid or returned from the Infrastructure 6
Sustainability Fund shall be deposited into the Fund and used to continue the 7
program established in this section. 8
* * * VHFA First-Generation Homebuyer Program and Down Payment 9
Assistance Program * * * 10
Sec. 4. 32 V.S.A. § 5930u is amended to read: 11
§ 5930u. TAX CREDIT FOR AFFORDABLE HOUSING 12
(a) Definitions. As used in this section: 13
* * * 14
(11) “First-generation homebuyer” means a homebuyer who self-attests 15
that the homebuyer is an individual: 16
(A) whose parents or legal guardians: 17
(i) do not have and during the homebuyer’s lifetime have not had 18
any residential ownership interest in any state; or 19
(ii) lost ownership of a home due to foreclosure, short sale, or 20
deed-in-lieu of foreclosure and have not owned a home since that loss; or 21 BILL AS INTRODUCED S.127
2025 Page 12 of 50
VT LEG #381201 v.6
(B) who has at any time been placed in foster care. 1
* * * 2
(g) Credit allocation. 3
(1) In any fiscal year, the allocating agency may award up to: 4
(A) $400,000.00 in total first-year credit allocations to all applicants 5
for rental housing projects, for an aggregate limit of $2,000,000.00 over any 6
given five-year period that credits are available under this subdivision (A). 7
(B) $675,000.00 in total first-year credit allocations for loans or 8
grants for owner-occupied unit financing or down payment loans as provided 9
in subdivision (b)(2) of this section consistent with the allocation plan, 10
including for new construction and manufactured housing, for an aggregate 11
limit of $3,375,000.00 over any given five-year period that credits are 12
available under this subdivision (B). Of the total first-year credit allocations 13
made under this subdivision (B), $250,000.00 shall be used each fiscal year for 14
manufactured home purchase and replacement. 15
(C) $250,000.00 in total first-year credit allocations for grants to 16
first-time homebuyers who are also first-generation homebuyers as provided in 17
subdivision (b)(3)(D) of this section, for an aggregate limit of $1,250,000.00 18
over any given five-year period that credits are available under this subdivision 19
(C). 20 BILL AS INTRODUCED S.127
2025 Page 13 of 50
VT LEG #381201 v.6
(2) If the full amount of first-year credits authorized by an award are not 1
allocated to a taxpayer, the Agency may reclaim the amount not allocated and 2
re-award such allocations to other applicants, and such re-awards shall not be 3
subject to the limits set forth in subdivision (1) of this subsection. 4
(h) Credit allocation; Down Payment Assistance Program. 5
(1) In fiscal year 2016 through fiscal year 2019, the allocating agency 6
may award up to $125,000.00 in total first-year credit allocations for loans 7
through the Down Payment Assistance Program created in subdivision (b)(2) 8
of this section. 9
(2) In fiscal year 2020 through fiscal year 2026, the allocating agency 10
may award up to $250,000.00 in total first-year credit allocations for loans 11
through the Down Payment Assistance Program created in subdivision (b)(3) 12
of this section. 13
(3) In fiscal year 2027 through fiscal year 2031, the allocating agency 14
may award up to $250,000.00 in total first-year credit allocations for loans 15
through the Down Payment Assistance Program created in subdivision (b)(3) 16
of this section. 17
* * * Housing and Residential Services Planning Committee * * * 18
Sec. 5. STATE HOUSING AND RESIDENTIAL SERVICES PLANNING 19
COMMITTEE; REPORT 20 BILL AS INTRODUCED S.127
2025 Page 14 of 50
VT LEG #381201 v.6
(a) Creation. There is created the State Housing and Residential Services 1
Planning Committee to generate a State plan to develop housing for individuals 2
with developmental disabilities. 3
(b) Membership. The Committee shall be composed of the following 4
members: 5
(1) one current member of the House of Representatives, who shall be 6
appointed by the Speaker of the House; 7
(2) one current member of the Senate, who shall be appointed by the 8
Committee on Committees; 9
(3) the Secretary of the Agency of Human Services or designee; 10
(4) the Commissioner of the Department of Disabilities, Aging, and 11
Independent Living or designee; 12
(5) the Commissioner of the Department of Housing and Community 13
Development or designee; 14
(6) the State Treasurer or designee; 15
(7) one member, appointed by the Developmental Disabilities Housing 16
Initiative; 17
(8) the Executive Director of the Vermont Developmental Disabilities 18
Council; 19
(9) one member, appointed by Green Mountain Self-Advocates; 20
(10) one member, appointed by Vermont Care Partners; and 21 BILL AS INTRODUCED S.127
2025 Page 15 of 50
VT LEG #381201 v.6
(11) one member, appointed by the Vermont Housing and Conservation 1
Board. 2
(c) Powers and duties. The Committee shall create an actionable plan to 3
develop housing for individuals with developmental disabilities that reflects 4
the diversity of needs expressed by those individuals and their families, 5
including individuals with high-support needs who require 24-hour care and 6
those with specific communication needs. The plan shall include: 7
(1) a schedule for the creation of at least 600 additional units of service-8
supported housing; 9
(2) the number and description of the support needs of individuals with 10
developmental disabilities anticipated to be served annually; 11
(3) anticipated funding needs; and 12
(4) recommendations for changes in State laws or policies that are 13
obstacles to the development of housing needed by individuals with Medicaid-14
funded home-and community-based services. 15
(d) Assistance. For purposes of scheduling meetings and preparing 16
recommended legislation, the Committee shall have the assistance of the 17
Office of Legislative Operations and the Office of Legislative Counsel. 18
(e) Report. On or before November 15, 2025, the Committee shall submit 19
a written report to the House Committees on General and Housing and on 20
Human Services and the Senate Committees on Economic Development, 21 BILL AS INTRODUCED S.127
2025 Page 16 of 50
VT LEG #381201 v.6
Housing and General Affairs and on Health and Welfare with its findings and 1
any recommendations for legislative action. 2
(f) Meetings. 3
(1) The Secretary of Human Services shall call the first meeting of the 4
Committee to occur on or before July 15, 2025. 5
(2) The Committee shall select a chair from among its members at the 6
first meeting. 7
(3) A majority of the membership shall constitute a quorum. 8
(4) The Committee shall cease to exist on November 30, 2025. 9
(g) Compensation and reimbursement. For attendance at meetings during 10
adjournment of the General Assembly, a legislative member of the Committee 11
serving in the member’s capacity as a legislator shall be entitled to per diem 12
compensation and reimbursement of expenses pursuant to 2 V.S.A. § 23 for 13
not more than five meetings. These payments shall be made from monies 14
appropriated to the General Assembly. 15
* * * Housing and Public Accommodation Protections * * * 16
Sec. 6. 9 V.S.A. § 4501 is amended to read: 17
§ 4501. DEFINITIONS 18
As used in this chapter: 19
* * * 20 BILL AS INTRODUCED S.127
2025 Page 17 of 50
VT LEG #381201 v.6
(12)(A) “Harass” means to engage in unwelcome conduct that detracts 1
from, undermines, or interferes with a person’s: 2
(i) use of a place of public accommodation or any of the 3
accommodations, advantages, facilities, or privileges of a place of public 4
accommodation because of the person’s race, creed, color, national origin, 5
citizenship, marital status, sex, sexual orientation, gender identity, or disability; 6
or 7
(ii) terms, conditions, privileges, or protections in the sale or rental 8
of a dwelling or other real estate, or in the provision of services or facilities in 9
connection with a dwelling or other real estate, because of the person’s race, 10
sex, sexual orientation, gender identity, age, marital status, religious creed, 11
color, national origin, citizenship, or disability, or because the person intends 12
to occupy a dwelling with one or more minor children, or because the person is 13
a recipient of public assistance, or because the person is a victim of abuse, 14
sexual assault, or stalking. 15
* * * 16
Sec. 7. 9 V.S.A. § 4502 is amended to read: 17
§ 4502. PUBLIC ACCOMMODATIONS 18
(a) An owner or operator of a place of public accommodation or an agent 19
or employee of such owner or operator shall not, because of the race, creed, 20
color, national origin, citizenship, immigration status, marital status, sex, 21 BILL AS INTRODUCED S.127
2025 Page 18 of 50
VT LEG #381201 v.6
sexual orientation, or gender identity of any person, refuse, withhold from, or 1
deny to that person any of the accommodations, advantages, facilities, and 2
privileges of the place of public accommodation. 3
* * * 4
Sec. 8. 9 V.S.A. § 4503 is amended to read: 5
§ 4503. UNFAIR HOUSING PRACTICES 6
(a) It shall be unlawful for any person: 7
(1) To refuse to sell or rent, or refuse to negotiate for the sale or rental 8
of, or otherwise make unavailable or deny, a dwelling or other real estate to 9
any person because of the race, sex, sexual orientation, gender identity, age, 10
marital status, religious creed, color, national origin, citizenship, or disability 11
of a person, or because a person intends to occupy a dwelling with one or more 12
minor children, or because a person is a recipient of public assistance, or 13
because a person is a victim of abuse, sexual assault, or stalking. 14
(2) To discriminate against, or to harass, any person in the terms, 15
conditions, privileges, and protections of the sale or rental of a dwelling or 16
other real estate, or in the provision of services or facilities in connection with 17
a dwelling or other real estate, because of the race, sex, sexual orientation, 18
gender identity, age, marital status, religious creed, color, national origin, 19
citizenship, or disability of a person, or because a person intends to occupy a 20
dwelling with one or more minor children, or because a person is a recipient of 21 BILL AS INTRODUCED S.127
2025 Page 19 of 50
VT LEG #381201 v.6
public assistance, or because a person is a victim of abuse, sexual assault, or 1
stalking. 2
(3) To make, print, or publish, or cause to be made, printed, or published 3
any notice, statement, or advertisement, with respect to the sale or rental of a 4
dwelling or other real estate that indicates any preference, limitation, or 5
discrimination based on race, sex, sexual orientation, gender identity, age, 6
marital status, religious creed, color, national origin, citizenship, or disability 7
of a person, or because a person intends to occupy a dwelling with one or more 8
minor children, or because a person is a recipient of public assistance, or 9
because a person is a victim of abuse, sexual assault, or stalking. 10
(4) To represent to any person because of the race, sex, sexual 11
orientation, gender identity, age, marital status, religious creed, color, national 12
origin, citizenship, or disability of a person, or because a person intends to 13
occupy a dwelling with one or more minor children, or because a person is a 14
recipient of public assistance, or because a person is a victim of abuse, sexual 15
assault, or stalking, that any dwelling or other real estate is not available for 16
inspection, sale, or rental when the dwelling or real estate is in fact so 17
available. 18
* * * 19
(6) To discriminate against any person in the making or purchasing of 20
loans or providing other financial assistance for real-estate-related transactions 21 BILL AS INTRODUCED S.127
2025 Page 20 of 50
VT LEG #381201 v.6
or in the selling, brokering, or appraising of residential real property, because 1
of the race, sex, sexual orientation, gender identity, age, marital status, 2
religious creed, color, national origin, citizenship, or disability of a person, or 3
because a person intends to occupy a dwelling with one or more minor 4
children, or because a person is a recipient of public assistance, or because a 5
person is a victim of abuse, sexual assault, or stalking. 6
(7) To engage in blockbusting practices, for profit, which may include 7
inducing or attempting to induce a person to sell or rent a dwelling by 8
representations regarding the entry into the neighborhood of a person or 9
persons of a particular race, sex, sexual orientation, gender identity, age, 10
marital status, religious creed, color, national origin, citizenship, or disability 11
of a person, or because a person intends to occupy a dwelling with one or more 12
minor children, or because a person is a recipient of public assistance, or 13
because a person is a victim of abuse, sexual assault, or stalking. 14
(8) To deny any person access to or membership or participation in any 15
multiple listing service, real estate brokers’ organization, or other service, 16
organization, or facility relating to the business of selling or renting dwellings, 17
or to discriminate against any person in the terms or conditions of such access, 18
membership, or participation, on account of race, sex, sexual orientation, 19
gender identity, age, marital status, religious creed, color, national origin, 20
citizenship, or disability of a person, or because a person is a recipient of 21 BILL AS INTRODUCED S.127
2025 Page 21 of 50
VT LEG #381201 v.6
public assistance, or because a person is a victim of abuse, sexual assault, or 1
stalking. 2
* * * 3
(12) To discriminate in land use decisions or in the permitting of 4
housing because of race, sex, sexual orientation, gender identity, age, marital 5
status, religious creed, color, national origin, citizenship, disability, the 6
presence of one or more minor children, income, or because of the receipt of 7
public assistance, or because a person is a victim of abuse, sexual assault, or 8
stalking, except as otherwise provided by law. 9
* * * 10
(d) If required by federal law, the verification of immigration status shall 11
not constitute a violation of subsection (a) of this section with respect to the 12
sale and rental of dwellings. 13
* * * LURB Appeals Study * * * 14
Sec. 9. 2024 Acts and Resolves No. 181, Sec. 11a is amended to read: 15
Sec. 11a. ACT 250 APPEALS STUDY 16
(a) On or before January 15, 2026 November 15, 2025, the Land Use 17
Review Board shall issue a report evaluating whether to transfer appeals of 18
permit decisions and jurisdictional opinions issued pursuant to 10 V.S.A. 19
chapter 151 to the Land Use Review Board or whether they should remain at 20
the Environmental Division of the Superior Court. The Board shall convene a 21 BILL AS INTRODUCED S.127
2025 Page 22 of 50
VT LEG #381201 v.6
stakeholder group that at a minimum shall be composed of a representative of 1
environmental interests, attorneys that practice environmental and 2
development law in Vermont, the Vermont League of Cities and Towns, the 3
Vermont Association of Planning and Development Agencies, the Vermont 4
Chamber of Commerce, the Land Access and Opportunity Board, the Office of 5
Racial Equity, the Vermont Association of Realtors, a representative of non-6
profit housing development interests, a representative of for-profit housing 7
development interests, a representative of commercial development interests, 8
an engineer with experience in development, the Agency of Commerce and 9
Community Development, and the Agency of Natural Resources in preparing 10
the report. The Board shall provide notice of the stakeholder meetings on its 11
website and each meeting shall provide time for public comment. 12
(b) The report shall at minimum recommend: 13
(1) whether Whether to allow consolidation of appeals at the Board, or 14
with the Environmental Division of the Superior Court, and how, including 15
what resources the Board would need, if transferred to the Board, appeals of 16
permit decisions issued under 24 V.S.A. chapter 117 and the Agency of 17
Natural Resources can be consolidated with Act 250 appeals;. 18
(2) how How to prioritize and expedite the adjudication of appeals 19
related to housing projects, including the use of hearing officers to expedite 20
appeals and the setting of timelines for processing of housing appeals;. 21 BILL AS INTRODUCED S.127
2025 Page 23 of 50
VT LEG #381201 v.6
(3) procedural Procedural rules to govern the Board’s administration of 1
Act 250 and the adjudication of appeals of Act 250 decisions. These rules 2
shall include procedures to create a firewall and eliminate any potential for 3
conflicts with the Board managing appeals and issuing permit decisions and 4
jurisdictional opinions; and. 5
(4) other Other actions the Board should take to promote the efficient 6
and effective adjudication of appeals, including any procedural improvements 7
to the Act 250 permitting process and jurisdictional opinion appeals. 8
(c) The report shall be submitted to the Senate Committees on Economic 9
Development, Housing and General Affairs and on Natural Resources and 10
Energy and the House Committee on Environment and Energy. 11
* * * Brownfields * * * 12
Sec. 10. 10 V.S.A. § 6604c is amended to read: 13
§ 6604c. MANAGEMENT OF DEVELOPMENT SOILS 14
(a) Management of development soils. Notwithstanding any other 15
requirements of this chapter to the contrary, development soils may be 16
managed at a location permitted pursuant to an insignificant waste event 17
approval authorization issued pursuant to the Solid Waste Management Rules 18
that contains, at a minimum, the following: 19 BILL AS INTRODUCED S.127
2025 Page 24 of 50
VT LEG #381201 v.6
(1) the development soils are generated from a hazardous materials site 1
managed pursuant to a corrective action plan or a soil management plan 2
approved by the Secretary; 3
(2) the development soils have been tested for arsenic, lead, and 4
polyaromatic hydrocarbons pursuant to a monitoring plan approved by the 5
Secretary that ensures that the soils do not leach above groundwater 6
enforcement standards; 7
(3) the location where the soils are managed is appropriate for the 8
amount and type of material being managed; 9
(4) the soils are capped in a manner approved by the Secretary; 10
(5) any activity that may disturb the development soils at the permitted 11
location shall be conducted pursuant to a soil management plan approved by 12
the Secretary; and 13
(6) the permittee files a record notice of where the soils are managed in 14
the land records. 15
* * * 16
Sec. 11. REPORT ON THE STATUS OF MANAGEMENT OF 17
DEVELOPMENT SOILS 18
(a) As part of the biennial report to the House Committee on Environment 19
and the Senate Committee on Natural Resources and Energy under 10 V.S.A. 20
§ 6604(c), the Secretary of Natural Resources shall report on the status of the 21 BILL AS INTRODUCED S.127
2025 Page 25 of 50
VT LEG #381201 v.6
management of development soils in the State under 10 V.S.A. § 6604c. The 1
report shall include: 2
(1) the number of insignificant waste event approval authorizations 3
issued by the Secretary in the previous two years for the management of 4
development soils; 5
(2) the number of certified categorical solid waste facilities operating in 6
the State for the management of development soils; 7
(3) a summary of how the majority of development soils in the State are 8
being managed; 9
(4) an estimate of the cost to manage development soils, depending on 10
management method; and 11
(5) any additional information the Secretary determines relevant to the 12
management of development soils in the State. 13
(b) As used in this section, “development soil” has the same meaning as in 14
10 V.S.A. § 6602(39). 15
Sec. 12. 10 V.S.A. § 6641 is amended to read: 16
§ 6641. BROWNFIELD PROPERTY CLEANUP PROGRAM; CREATION; 17
POWERS 18
(a) There is created the Brownfield Property Cleanup Program to enable 19
certain interested parties to request the assistance of the Secretary to review 20
and oversee work plans for investigating, abating, removing, remediating, and 21 BILL AS INTRODUCED S.127
2025 Page 26 of 50
VT LEG #381201 v.6
monitoring a property in exchange for protection from certain liabilities under 1
section 6615 of this title. The Program shall be administered by the Secretary 2
who shall: 3
* * * 4
(c) When conducting any review required by this subchapter, the Secretary 5
shall prioritize the review of remediation at a site that contains housing. 6
Sec. 13. BROWNFIELDS PROCESS IMPROVEMENT; REPORT 7
On or before November 1, 2025, the Secretary of Natural Resources shall 8
report to the House Committees on Environment and on General and Housing 9
and the Senate Committees on Economic Development, Housing and General 10
Affairs and on Natural Resources and Energy with proposals to make the 11
Program established pursuant to 10 V.S.A. chapter 159, subchapter 3 12
(brownfields reuse and liability limitation) substantially more efficient. At a 13
minimum, the report shall include both of the following: 14
(1) A survey of stakeholders in the brownfields program to identify 15
areas that present challenges to the redevelopment of contaminated properties, 16
with a focus on redevelopment for housing. The Secretary shall provide 17
recommendations to resolve these challenges. 18
(2) An analysis of strengths and weaknesses of implementing a licensed 19
site professional program within the State. The Secretary shall make a 20
recommendation on whether such a program should be implemented. If the 21 BILL AS INTRODUCED S.127
2025 Page 27 of 50
VT LEG #381201 v.6
Secretary recommends implementation, the report shall include any changes to 1
statute or budget needed to implement this program. 2
Sec. 14. 2023 Acts and Resolves No. 78, Sec. B.1103, as amended by 2024 3
Acts and Resolves No. 87, Sec. 43, is further amended to read: 4
Sec. B.1103 CLIMATE AND ENVIRONMENT – FISCAL YEAR 2024 5
ONE-TIME APPROPRIATIONS 6
* * * 7
(h) In fiscal year 2024, the amount of $2,500,000 General Fund is 8
appropriated to the Department of Environmental Conservation Environmental 9
Contingency Fund established pursuant to 10 V.S.A. § 1283 for the 10
Brownfields Reuse and Environmental Liability Limitation Act as codified in 11
10 V.S.A. chapter 159. Funds shall be used for the assessment and cleanup, 12
planning, and cleanup of brownfields sites. 13
* * * 14
Sec. 15. BROWNFIELD FUNDING 15
The sum of $4,000,000.00 is appropriated from the General Fund to the 16
Brownfield Revitalization Fund established in 10 V.S.A. § 6654. The Agency 17
of Commerce and Community Development shall award the amount of 18
$2,000,000.00 in fiscal year 2026 to regional planning commissions for the 19
purposes of brownfields assessment. In awarding funds under this section, the 20
Secretary of Commerce and Community Development, in consultation with the 21 BILL AS INTRODUCED S.127
2025 Page 28 of 50
VT LEG #381201 v.6
Vermont Association of Planning and Development Agencies, shall select one 1
regional planning commission to administer these funds. To ensure statewide 2
availability, the selected regional planning commission shall subgrant to 3
regional planning commissions with brownfield programs, with not more than 4
10 percent of the funds being used for administrative purposes. 5
* * * Tax Increment Financing * * * 6
Sec. 16. 24 V.S.A. chapter 53, subchapter 7 is added to read: 7
Subchapter 7. Community and Housing Infrastructure Program 8
§ 1906. DEFINITIONS 9
As used in this subchapter: 10
(1) “Affordable housing” means either of the following: 11
(A) Owner-occupied housing for which the total annual cost of 12
ownership, including principal, interest, taxes, insurance, and condominium 13
association fees, does not exceed 30 percent of the gross annual income of a 14
household at 150 percent of the highest of the following: 15
(i) the county median income, as defined by the U.S. Department 16
of Housing and Urban Development; 17
(ii) the standard metropolitan statistical area median income if the 18
municipality is located in such an area, as defined by the U.S. Department of 19
Housing and Urban Development; or 20 BILL AS INTRODUCED S.127
2025 Page 29 of 50
VT LEG #381201 v.6
(iii) the statewide median income, as defined by the U.S. 1
Department of Housing and Urban Development. 2
(B) Rental housing for which the total annual cost of renting, 3
including rent, utilities, and condominium association fees, does not exceed 30 4
percent of the gross annual income of a household at 150 percent of the highest 5
of the following: 6
(i) the county median income, as defined by the U.S. Department 7
of Housing and Urban Development; 8
(ii) the standard metropolitan statistical area median income if the 9
municipality is located in such an area, as defined by the U.S. Department of 10
Housing and Urban Development; or 11
(iii) the statewide median income, as defined by the U.S. 12
Department of Housing and Urban Development. 13
(2) “Brownfield” means a property on which the presence or potential 14
presence of a hazardous material, pollutant, or contaminant complicates the 15
expansion, development, redevelopment, or reuse of the property. 16
(3) “Committed” means pledged and appropriated for the purpose of the 17
current and future payment of financing and related costs. 18
(4) “Developer” means the person undertaking to construct a housing 19
development. 20 BILL AS INTRODUCED S.127
2025 Page 30 of 50
VT LEG #381201 v.6
(5) “Financing” means debt, including principal, interest, and any fees 1
or charges directly related to that debt, incurred by a sponsor, or other 2
instruments or borrowing used by a sponsor, to pay for a housing infrastructure 3
project and, in the case of a sponsor that is a municipality, authorized by the 4
municipality pursuant to section 1910a of this subchapter. 5
(6) “Housing development” means the construction of one or more 6
buildings that includes affordable housing. 7
(7) “Housing development site” means the parcel or parcels 8
encompassing a housing development as authorized by a municipality pursuant 9
to section 1908 of this subchapter. 10
(8) “Housing infrastructure agreement” means a legally binding 11
agreement to finance and develop a housing infrastructure project and to 12
construct a housing development among a municipality, a developer, and, if 13
applicable, a third-party sponsor. 14
(9) “Housing infrastructure project” means one or more improvements 15
authorized by a municipality pursuant to section 1908 of this subchapter. 16
(10) “Improvements” means: 17
(A) the installation or construction of infrastructure that will serve a 18
public good and fulfill the purpose of housing infrastructure tax increment 19
financing as stated in section 1907 of this subchapter, including utilities, digital 20
infrastructure, transportation, public recreation, commercial and industrial 21 BILL AS INTRODUCED S.127
2025 Page 31 of 50
VT LEG #381201 v.6
facilities, parking, public facilities and amenities, land and property acquisition 1
and demolition, brownfield remediation, site preparation, and flood 2
remediation and mitigation; and 3
(B) the funding of debt service interest payments for a period of up to 4
four years, beginning on the date on which the debt is first incurred. 5
(11) “Legislative body” means the mayor and alderboard, the city 6
council, the selectboard, and the president and trustees of an incorporated 7
village, as appropriate. 8
(12) “Municipality” means a city, town, or incorporated village. 9
(13) “Original taxable value” means the total valuation as determined in 10
accordance with 32 V.S.A. chapter 129 of all taxable real property located 11
within a housing development site as of its creation date, provided that no 12
parcel within the housing development site shall be divided or bisected. 13
(14) “Related costs” means expenses incurred and paid by a 14
municipality, exclusive of the actual cost of constructing and financing 15
improvements, that are directly related to the creation and implementation of 16
the municipality’s housing infrastructure project, including reimbursement of 17
sums previously advanced by the municipality for those purposes. Related 18
costs may include direct municipal expenses such as departmental or personnel 19
costs related to creating or administering the housing infrastructure project to 20
the extent they are paid from the tax increment realized from municipal and not 21 BILL AS INTRODUCED S.127
2025 Page 32 of 50
VT LEG #381201 v.6
education taxes and using only that portion of the municipal increment above 1
the percentage required for serving debt as determined in accordance with 2
subsection 1910c(c) of this subchapter. 3
(15) “Sponsor” means the person undertaking to finance a housing 4
infrastructure project. Any of a municipality, a developer, or an independent 5
agency that meets State lending standards may serve as a sponsor for a housing 6
infrastructure project. 7
§ 1907. PURPOSE 8
The purpose of housing infrastructure tax increment financing is to provide 9
revenues for improvements and related costs to stimulate housing development 10
in Vermont. 11
§ 1908. CREATION OF HOUSING INFRASTRUCTURE PROJECT AND 12
HOUSING DEVELOPMENT SITE 13
(a) The legislative body of a municipality may create within its jurisdiction 14
a housing infrastructure project, which shall consist of improvements that 15
stimulate the development of housing, and a housing development site, which 16
shall consist of the parcel or parcels on which a housing development is 17
installed or constructed and any immediately contiguous parcels. 18
(b) To create a housing infrastructure project and housing development 19
site, a municipality, in coordination with stakeholders, shall: 20
(1) develop a housing development plan, including: 21 BILL AS INTRODUCED S.127
2025 Page 33 of 50
VT LEG #381201 v.6
(A) a description of the proposed housing infrastructure project, the 1
proposed housing development, and the proposed housing development site; 2
(B) identification of a sponsor; 3
(C) a tax increment financing plan meeting the standards of 4
subsection 1910(f) of this subchapter; 5
(D) a pro forma projection of expected costs of the proposed housing 6
infrastructure project; 7
(E) a projection of the tax increment to be generated by the proposed 8
housing development; and 9
(F) a development schedule that includes a list, a cost estimate, and a 10
schedule for the proposed housing infrastructure project and the proposed 11
housing development; 12
(2) develop a plan describing the housing development site by its 13
boundaries and the properties therein, entitled “Proposed Housing 14
Development Site (municipal name), Vermont”; 15
(3) hold one or more public hearings, after public notice, on the 16
proposed housing infrastructure project, including the plans developed 17
pursuant to this subsection; and 18
(4) adopt by act of the legislative body of the municipality the plan 19
developed under subdivision (2) of this subsection, which shall be recorded 20
with the municipal clerk and lister or assessor. 21 BILL AS INTRODUCED S.127
2025 Page 34 of 50
VT LEG #381201 v.6
(c) The creation of a housing development site shall occur at 12:01 a.m. on 1
April 1 of the calendar year in which the Vermont Economic Progress Council 2
approves the use of tax increment financing for the housing infrastructure 3
project pursuant to section 1910 of this subchapter. 4
§ 1909. HOUSING INFRASTRUCTURE AGREEMENT 5
(a) The housing infrastructure agreement for a housing infrastructure 6
project shall: 7
(1) clearly identify the sponsor for the housing infrastructure project; 8
(2) clearly identify the developer and the housing development for the 9
housing development site; 10
(3) obligate the tax increments retained pursuant to section 1910c of this 11
subchapter for not more than the financing and related costs for the housing 12
infrastructure project; and 13
(4) provide for performance assurances to reasonably secure the 14
obligations of all parties under the housing infrastructure agreement. 15
(b) A municipality shall provide notice of the terms of the housing 16
infrastructure agreement for the municipality’s housing infrastructure project 17
to the legal voters of the municipality and shall provide the same information 18
as set forth in subsection 1910a(e) of this subchapter. 19 BILL AS INTRODUCED S.127
2025 Page 35 of 50
VT LEG #381201 v.6
§ 1910. HOUSING INFRASTRUCTURE PROJECT APPLICATION; 1
VERMONT ECONOMIC PROGRESS COUNCIL 2
(a) Application. A municipality, upon approval of its legislative body, may 3
apply to the Vermont Economic Progress Council to use tax increment 4
financing for a housing infrastructure project. 5
(b) Review. The Vermont Economic Progress Council may approve only 6
applications meeting the process requirements, the project criterion, and any of 7
the location criteria of this section. 8
(c) Process requirements. The Vermont Economic Progress Council shall 9
review a municipality’s housing infrastructure project application to determine 10
whether the municipality has: 11
(1) created a housing infrastructure project and housing development 12
site pursuant to section 1908 of this subchapter; 13
(2) executed a housing infrastructure agreement for the housing 14
infrastructure project adhering to the standards of section 1909 of this 15
subchapter with a developer and, if the municipality is not financing the 16
housing infrastructure project itself, a sponsor; and 17
(3) approved or pledged to use incremental municipal tax revenues for 18
the housing infrastructure project in the proportion provided for municipal tax 19
revenues in section 1910c of this subchapter. 20 BILL AS INTRODUCED S.127
2025 Page 36 of 50
VT LEG #381201 v.6
(d) Project criterion. The Vermont Economic Progress Council shall review 1
a municipality’s housing infrastructure project application to determine whether 2
the projected housing development includes affordable housing. 3
(e) Location criteria. The Vermont Economic Progress Council shall review 4
a municipality’s housing infrastructure project application to determine whether 5
the housing development site is located within one of the following areas: 6
(1) an area designated Tier 1A or Tier 1B pursuant to 10 V.S.A. chapter 7
151 (State land use and development plans) or an area exempt from the 8
provisions of that chapter pursuant to 10 V.S.A. § 6081(dd) (interim housing 9
exemptions); 10
(2) an area designated Tier 2 pursuant to 10 V.S.A. chapter 151 (State 11
land use and development plans) or an area in which the housing development 12
site is compatible with regional and town land use plans as evidenced by a 13
letter of support from the regional planning commission for the municipality; 14
or 15
(3) an existing settlement or an area within one-half mile of an existing 16
settlement, as that term is defined in 10 V.S.A. § 6001(16). 17
(f) Tax increment financing plan. The Vermont Economic Progress 18
Council shall approve a municipality’s tax increment financing plan prior to a 19
sponsor’s incurrence of debt for the housing infrastructure project, including, if 20
the sponsor is a municipality, prior to a public vote to pledge the credit of the 21 BILL AS INTRODUCED S.127
2025 Page 37 of 50
VT LEG #381201 v.6
municipality under section 1910a of this subchapter. The tax increment 1
financing plan shall include: 2
(1) a statement of costs and sources of revenue; 3
(2) estimates of assessed values within the housing development site; 4
(3) the portion of those assessed values to be applied to the housing 5
infrastructure project; 6
(4) the resulting tax increments in each year of the financial plan; 7
(5) the amount of bonded indebtedness or other financing to be incurred; 8
(6) other sources of financing and anticipated revenues; and 9
(7) the duration of the financial plan. 10
§ 1910a. INDEBTEDNESS 11
(a) A municipality approved for tax increment financing under section 12
1910 of this subchapter may incur indebtedness against revenues of the 13
housing development site at any time during a period of up to five years 14
following the creation of the housing development site. The Vermont 15
Economic Progress Council may extend this debt incursion period by up to 16
three years. If no debt is incurred for the housing infrastructure project during 17
the debt incursion period, whether by the municipality or sponsor, the housing 18
development site shall terminate. 19
(b) Notwithstanding any provision of any municipal charter, each instance 20
of borrowing by a municipality to finance or otherwise pay for a housing 21 BILL AS INTRODUCED S.127
2025 Page 38 of 50
VT LEG #381201 v.6
infrastructure project shall occur only after the legal voters of the municipality, 1
by a majority vote of all voters present and voting on the question at a special 2
or annual municipal meeting duly warned for the purpose, authorize the 3
legislative body to pledge the credit of the municipality, borrow, or otherwise 4
secure the debt for the specific purposes so warned. 5
(c) Any indebtedness incurred under this section may be retired over any 6
period authorized by the legislative body of the municipality. 7
(d) The housing development site shall continue until the date and hour the 8
indebtedness is retired or, if no debt is incurred, five years following the 9
creation of the housing development site. 10
(e) A municipal legislative body shall provide information to the public 11
prior to the public vote required under subsection (b) of this section. This 12
information shall include the amount and types of debt and related costs to be 13
incurred, including principal, interest, and fees; terms of the debt; the housing 14
infrastructure project to be financed; the housing development projected to 15
occur because of the housing infrastructure project; and notice to the voters 16
that if the tax increment received by the municipality from any property tax 17
source is insufficient to pay the principal and interest on the debt in any year, 18
the municipality shall remain liable for the full payment of the principal and 19
interest for the term of the indebtedness. If interfund loans within the 20 BILL AS INTRODUCED S.127
2025 Page 39 of 50
VT LEG #381201 v.6
municipality are used, the information must also include documentation of the 1
terms and conditions of the loan. 2
(f) If interfund loans within the municipality are used as the method of 3
financing, no interest shall be charged. 4
(g) The use of a bond anticipation note shall not be considered a first 5
incurrence of debt pursuant to subsection (a) of this section. 6
§ 1910b. ORIGINAL TAXABLE VALUE; TAX INCREMENT 7
(a) As of the date the housing development site is created, the lister or 8
assessor for the municipality shall certify the original taxable value and shall 9
certify to the legislative body in each year thereafter during the life of the 10
housing development site the amount by which the total valuation as 11
determined in accordance with 32 V.S.A. chapter 129 of all taxable real 12
property within the housing development site has increased or decreased 13
relative to the original taxable value. 14
(b) Annually throughout the life of the housing development site, the lister 15
or assessor shall include not more than the original taxable value of the real 16
property in the assessed valuation upon which the treasurer computes the rates 17
of all taxes levied by the municipality and every other taxing district in which 18
the housing development site is situated, but the treasurer shall extend all rates 19
so determined against the entire assessed valuation of real property for that 20
year. 21 BILL AS INTRODUCED S.127
2025 Page 40 of 50
VT LEG #381201 v.6
(c) Annually throughout the life of the housing development site, a 1
municipality shall remit not less than the aggregate education property tax due 2
on the original taxable value to the Education Fund. 3
(d) Annually throughout the life of the housing development site, the 4
municipality shall hold apart, rather than remit to the taxing districts, that 5
proportion of all taxes paid that year on the real property within the housing 6
development site that the excess valuation bears to the total assessed valuation. 7
The amount held apart each year is the “tax increment” for that year. The tax 8
increment shall only be used for financing and related costs. 9
(e) Not more than the percentages established pursuant to section 1910c of 10
this subchapter of the municipal and State education tax increments received 11
with respect to the housing development site and committed for the payment 12
for financing for improvements and related costs shall be segregated by the 13
municipality in a special tax increment financing account and in its official 14
books and records until all capital indebtedness incurred for the housing 15
infrastructure project has been fully paid. The final payment shall be reported 16
to the treasurer, who shall thereafter include the entire assessed valuation of the 17
housing development site in the assessed valuations upon which the municipal 18
and other tax rates are computed and extended, and thereafter no taxes from 19
the housing development site shall be deposited in the special tax increment 20
financing account. 21 BILL AS INTRODUCED S.127
2025 Page 41 of 50
VT LEG #381201 v.6
(f) Notwithstanding any charter provision or other provision, all property 1
taxes assessed within a housing development site shall be subject to the 2
provisions of this section. Special assessments levied under chapter 76A or 87 3
of this title or under a municipal charter shall not be considered property taxes 4
for the purpose of this section if the proceeds are used exclusively for 5
operating expenses related to properties within the housing development site 6
and not for improvements within the housing development site. 7
§ 1910c. USE OF TAX INCREMENT; RETENTION PERIOD 8
(a) Uses of tax increments. A municipality may apply tax increments 9
retained pursuant to this subchapter to debt incurred within the period 10
permitted under section 1910a of this subchapter, to related costs, and to the 11
direct payment of the cost of a housing infrastructure project. Any direct 12
payment shall be subject to the same public vote provisions of section 1910a of 13
this subchapter as apply to debt. 14
(b) Education property tax increment. Up to 80 percent of the education 15
property tax increment may be retained for up to 20 years, beginning the first 16
year in which debt is incurred for the housing infrastructure project. Upon 17
incurring the first debt, a municipality shall notify the Department of Taxes 18
and the Vermont Economic Progress Council of the beginning of the retention 19
period of the education property tax increment. 20 BILL AS INTRODUCED S.127
2025 Page 42 of 50
VT LEG #381201 v.6
(c) Municipal property tax increment. Not less than 100 percent of the 1
municipal property tax increment may be retained, beginning the first year in 2
which debt is incurred for the housing infrastructure project. 3
(d) Excess tax increment. 4
(1) Of the municipal and education property tax increments received in 5
any tax year that exceed the amounts committed for the payment of the 6
financing and related costs for a housing infrastructure project, equal portions 7
of each increment may be retained for the following purposes: 8
(A) to prepay principal and interest on the financing; 9
(B) to place in a special tax increment financing account required 10
pursuant to subsection 1910b(e) of this subchapter and use for future financing 11
payments; or 12
(C) to use for defeasance of the financing. 13
(2) Any remaining portion of the excess education property tax 14
increment shall be distributed to the Education Fund. Any remaining portion 15
of the excess municipal property tax increment shall be distributed to the city, 16
town, or village budget in the proportion that each budget bears to the 17
combined total of the budgets unless otherwise negotiated by the city, town, or 18
village. 19
§ 1910d. INFORMATION REPORTING 20
(a) A municipality with an active housing infrastructure project shall: 21 BILL AS INTRODUCED S.127
2025 Page 43 of 50
VT LEG #381201 v.6
(1) develop a system, segregated for the housing infrastructure project, 1
to identify, collect, and maintain all data and information necessary to fulfill 2
the reporting requirements of this section; 3
(2) provide timely notification to the Department of Taxes and the 4
Vermont Economic Progress Council of any housing infrastructure project 5
debt, public vote, or vote by the municipal legislative body immediately 6
following the debt incurrence or public vote on a form prescribed by the 7
Council, including copies of public notices, agendas, minutes, vote tally, and a 8
copy of the information provided to the public pursuant to subsection 1910a(e) 9
of this subchapter; and 10
(3) annually on or before February 15, submit on a form prescribed by 11
the Vermont Economic Progress Council an annual report to the Council and 12
the Department of Taxes, including the information required by subdivision (2) 13
of this subsection if not previously submitted, the information required for 14
annual audit under section 1910e of this subchapter, and any information 15
required by the Council or the Department of Taxes for the report required 16
pursuant to subsection (b) of this section. 17
(b) Annually on or before April 1, the Vermont Economic Progress Council 18
and the Department of Taxes shall submit a report to the Senate Committees on 19
Economic Development, Housing and General Affairs and on Finance and the 20
House Committees on Commerce and Economic Development and on Ways 21 BILL AS INTRODUCED S.127
2025 Page 44 of 50
VT LEG #381201 v.6
and Means on housing infrastructure projects approved pursuant to this 1
subchapter, including for each of the following: 2
(1) the date of approval; 3
(2) a description of the housing infrastructure project; 4
(3) the original taxable value of the housing development site; 5
(4) the scope and value of projected and actual improvements and 6
developments in the housing development site, including the number of 7
housing units created; 8
(5) projected and actual incremental revenue amounts; 9
(6) the allocation of incremental revenue; and 10
(7) projected and actual financing. 11
§ 1910e. AUDITING 12
Annually on or before April 1 until the year following the end of the period 13
for retention of education property tax increment, a municipality with a 14
housing infrastructure project approved under this subchapter shall ensure that 15
the special tax increment financing account required by section 1910b of this 16
subchapter is subject to the annual audit prescribed in section 1681 or 1690 of 17
this title and submit a copy to the Vermont Economic Progress Council. If an 18
account is subject only to the audit under section 1681 of this title, the Council 19
shall ensure a process is in place to subject the account to an independent audit. 20
Procedures for the audit must include verification of the original taxable value 21 BILL AS INTRODUCED S.127
2025 Page 45 of 50
VT LEG #381201 v.6
and annual and total municipal and education property tax increments 1
generated, expenditures for financing and related costs, and current balance. 2
§ 1910f. GUIDANCE 3
(a) The Secretary of Commerce and Community Development, after 4
reasonable notice to a municipality and an opportunity for a hearing, may issue 5
decisions to a municipality on questions and inquiries concerning the 6
administration of housing infrastructure projects, statutes, rules, 7
noncompliance with this subchapter, and any instances of noncompliance 8
identified in audit reports conducted pursuant to section 1910e of this 9
subchapter. 10
(b) The Vermont Economic Progress Council shall prepare 11
recommendations for the Secretary of Commerce and Community 12
Development prior to any decision issued pursuant to subsection (a) of this 13
section. The Council may prepare recommendations in consultation with the 14
Commissioner of Taxes, the Attorney General, and the State Treasurer. In 15
preparing recommendations, the Council shall provide a municipality with a 16
reasonable opportunity to submit written information in support of its position. 17
(c) The Secretary of Commerce and Community Development shall review 18
the recommendations of the Council and issue a final written decision on each 19
matter within 60 days following receipt of the recommendations. The 20
Secretary may permit an appeal to be taken by any party to a Superior Court 21 BILL AS INTRODUCED S.127
2025 Page 46 of 50
VT LEG #381201 v.6
for determination of questions of law in the same manner as the Supreme Court 1
may by rule provide for appeals before final judgment from a Superior Court 2
before issuing a final decision. 3
(d) The Vermont Economic Progress Council may adopt rules that are 4
reasonably necessary to implement this subchapter. 5
Sec. 17. 32 V.S.A. § 3325 is amended to read: 6
§ 3325. VERMONT ECONOMIC PROGRESS COUNCIL 7
(a) Creation. The Vermont Economic Progress Council is created to 8
exercise the authority and perform the duties assigned to it, including its 9
authority and duties relating to: 10
(1) the Vermont Employment Growth Incentive Program pursuant to 11
subchapter 2 of this chapter; and 12
(2) tax increment financing districts pursuant to 24 V.S.A. chapter 53, 13
subchapter 5 and section 5404a of this title; and 14
(3) housing infrastructure tax increment financing pursuant to 24 V.S.A. 15
chapter 53, subchapter 7. 16
* * * 17
(g) Decisions not subject to review. A decision of the Council to approve 18
or deny an application under subchapter 2 of this chapter, or to approve or 19
deny a tax increment financing district pursuant to 24 V.S.A. chapter 53, 20
subchapter 5 and section 5404a of this title, or to approve or deny a housing 21 BILL AS INTRODUCED S.127
2025 Page 47 of 50
VT LEG #381201 v.6
infrastructure project pursuant to 24 V.S.A. chapter 53, subchapter 7 is an 1
administrative decision that is not subject to the contested case hearing 2
requirements under 3 V.S.A. chapter 25 and is not subject to judicial review. 3
* * * Taxes * * * 4
Sec. 18. 32 V.S.A. § 5811(21)(C) is amended to read: 5
(C) decreased by the following exemptions and deductions: 6
* * * 7
(iv) an amount equal to the itemized deduction for medical 8
expenses taken at the federal level by the taxpayer, under 26 U.S.C. § 213: 9
(I) minus the amount of the Vermont standard deduction and 10
Vermont personal exemptions taken by the taxpayer under this subdivision 11
(C); and 12
(II) minus any amount deducted at the federal level that is 13
attributable to the payment of an entrance fee or recurring monthly payment 14
made to a continuing care retirement community regulated under 8 V.S.A. 15
chapter 151, which exceeds the deductibility limits for premiums paid during 16
the taxable year on qualified long-term care insurance contracts under 26 17
U.S.C. 213(d)(10)(A). 18
Sec. 19. 32 V.S.A. § 3800 is amended to read: 19
§ 3800. STATUTORY PURPOSES 20
* * * 21 BILL AS INTRODUCED S.127
2025 Page 48 of 50
VT LEG #381201 v.6
(r) The statutory purpose of the exemption under section 3851 of this title 1
for certain new construction and improvements is to incentivize those 2
activities. 3
Sec. 20. 32 V.S.A. § 3851 is added to read: 4
§ 3851. NEW ACCESSORY DWELLING UNITS AND CERTAIN 5
PROPERTY IMPROVEMENTS 6
(a) An increase in the appraisal value of a property shall be exempted from 7
property taxation by fixing and maintaining the taxable value at the property’s 8
grand list value in the year immediately preceding improvements in the 9
following cases: 10
(1) the property has been rehabilitated or improved using a grant or loan 11
from the Vermont Housing Improvement Program and construction has been 12
fully completed in the previous 12 months; or 13
(2) the property has been improved through the construction of a new 14
accessory dwelling unit, as defined by 24 V.S.A. § 4303(38), and construction 15
has been fully completed in the previous 12 months. 16
(b) A decrease in appraisal value of a property subject to this exemption 17
due to damage or destruction from fire or act of nature may reduce the 18
property’s taxable value below the fixed value under subsection (a) of this 19
section. 20 BILL AS INTRODUCED S.127
2025 Page 49 of 50
VT LEG #381201 v.6
(c) The exemption under this section shall apply to the State education 1
property tax imposed under chapter 135 of this title and to municipal property 2
tax. 3
(d) An exemption under this section shall remain in effect for three years. 4
When the exemption period ends, the property shall be taxed at its most 5
recently appraised grand list value. 6
* * * Appropriations * * * 7
Sec. 21. APPROPRIATIONS 8
The following shall be appropriated from the General Fund in fiscal year 9
2026: 10
(1) The sum of $45,600,000.00 to the Department of Housing and 11
Community Development for the following purposes: 12
(A) $15,000,000.00 granted to the Vermont Housing Finance Agency 13
to continue implementation of the Middle-Income Homeownership 14
Development Program; 15
(B) $15,000,000.00 granted to the Vermont Housing Finance Agency 16
to continue implementation of the Rental Housing Revolving Loan Fund; 17
(C) $9,100,000.00 granted to the Vermont Bond Bank to implement 18
the Vermont Infrastructure Sustainability Fund; 19 BILL AS INTRODUCED S.127
2025 Page 50 of 50
VT LEG #381201 v.6
(D) $4,000,000.00 for the rehabilitation of eligible rental housing 1
units under the Rental Housing Improvement Program established in 10 V.S.A. 2
§ 699; 3
(E) $2,000,000.00 to improve mobile home park infrastructure under 4
the Manufactured Home Improvement and Repair Program established in 10 5
V.S.A. § 700; and 6
(F) $500,000.00 for grants to be made for the purpose of providing 7
homebuyer education, financial literacy counseling, and foreclosure prevention 8
programs operated by the five NeighborWorks America affiliated 9
HomeOwnership Centers. 10
(2) The sum of $100,000.00 to the State Treasurer to implement the 11
Positive Rental Payment Pilot Program. 12
* * * Effective Date * * * 13
Sec. 22. EFFECTIVE DATE 14
This act shall take effect on July 1, 2025. 15